Use Your Own Media to Counter Mass Media Hype

May 18, 2018

This time we hear from Christopher P. Condle, an advisor at Jarred Bunch Consulting, an Indianapolis, Ind.-based wealth management firm. He recalls an experience that taught him to counter media hype with frequent, evidence-based media of his own.

Many clients who spend a lot of time paying attention to financial media feel like they have to act fast with their money or risk missing out. When news outlets talk about an impending crash, they panic. When they hype up the latest-and-greatest investment like gold or bitcoin, they want in. As an advisor, my success relies on my ability to ease clients’ fears and keep them on their desired paths. But I didn’t always know how to do that.

About 10 years ago, in the period leading up to the 2008 recession, I had a client who reacted to every bit of news that came out. She was convinced that if she stayed invested in her current mutual fund she would lose all her money. By the time she called me her decision was already made — she wanted her investments moved into a holding bond. I showed her historical evidence that the market would turn around and that getting out now would make it much harder to recover her funds, but I was too late. The fear-based messaging was deeply engrained, and my advice fell on deaf ears.

Against my better judgment I moved her money. The crash did happen, and she did not lose as much as she would have had she stayed invested; however, over the next several years she never fully jumped back into the market. When we tried she got spooked by another “inevitable” downfall and couldn’t bring herself to invest in the original financial plan.

Over a six-year span this client had a 1.4% annual performance rate. If she had stuck to her original allocation she would have had a 12.5% performance rate. She had missed out on tens of thousands of dollars each year by reacting to the media about the recession, instead of trusting the evidence-based plan that we put together in the beginning. But it was hardly her fault; it was my job to eliminate behavioral finance errors from the equation. If my system for doing so wasn’t working, that meant I was not fulfilling my duty as her advisor. I realized that my strategy of talking clients off the ledge did not work. I had to keep them far from the ledge to begin with — and that meant constant communication.

Christopher P. Condle

To remain one step ahead of the media I began reaching out to clients any time there was suspicion of something major happening in the market. I provided evidence-based information to counter the gossip they heard from news reporters and I poured energy into educating clients on the basics of investing when they signed on with me. Over time, my firm developed a client communications strategy that focuses on training clients to remain resilient against the influx of messages they receive on a daily basis.

We created a client curriculum that includes educational videos, reading materials and interactive modules. We also provide clients with worksheets about financial wellness, 401(k) enrollment, market movements, and risk tolerance. We send out emails whenever there’s a significant amount of market noise to help clients understand the whole story, and not just the media’s magnified spin on the situation. Each week we post two new blog posts covering topics such as the dangers of impulsive behavior, rules of financial institutions, and strategies for financial organization.

I am in constant communication with my clients, ensuring they aren’t getting sucked into the fear-based mindset that so easily takes over when they disconnect from the facts. Since implementing these strategies I have not had any clients come to me in a panic wanting to jump ship on their plan during a market correction. Sure, they have questions, but they come to me to talk about them instead of letting them grow into irrational decisions. I keep clients invested and informed. And the solid, well-informed communications I provide helps counteract the news that otherwise may cause them to otherwise react quickly and mindlessly.